Field of the Invention
This invention relates generally to the field of computer financial analysis systems and more specifically to a user interface for such a system.
Current computer financial analysis systems allow a user to input personal financial data such as salary, expenses, assets, and investments which represent the user's initial financial state. The system will then output predictions of the user's future financial status based on mathematical models. Financial analysis systems typically analyze mortgage refinancing, loan amortization, renting or leasing versus buying a home, retirement planning, investment analysis and achieving financial goals. The input of the financial analysis system is typically a set of numbers. The output of the system may be a single number or it may be a table of numbers or a chart or graph.
The difficulty in designing a financial analysis system for a personal or home user is that in order to provide an accurate analysis, many figures have to be both entered by the user and interpreted by the user as output by the computer. Often the user is confronted with an entire display screen filled with numbers and short, often abbreviated, descriptive headings in both the input and output screens. If the user is unfamiliar with the names and functions of each of the numbers in the display, it will prevent the user from correctly and efficiently using the financial analysis system, and more seriously, will lead to incorrect conclusions about the user's financial state of affairs.
Traditional financial analysis systems use various methods to explain to the user the purpose of items on the screen. One method is called "hypertext" which allows a user to "point" to an item on the screen, for example, by using a cursor controlled by a mouse or by highlighting the items through keyboard selection. After an item is pointed to, the user presses a help button and a paragraph or two explaining the item, the item's purpose and function pops up onto the display screen. This help text remains on the screen until the user presses a keyboard or mouse button whereupon the help text disappears and the user is returned to the initial display. The user can proceed to highlight another item to obtain more help text for any of the items on the screen.
A problem with prior art systems is that the help text, when displayed, overlays some initial screen information which would be helpful to the user in understanding the function of the item. Sometimes, even the item itself is overlayed so that the user loses visual reference to the item. Other systems remove the initial display completely and present the user with a completely new screen containing the help text. When the user decides to go back to the initial display, the help text is removed and the initial display is restored.
With this latter technique, the user loses all visual reference to the item which is being explained by the help text. Such visual reference is important when the item is one of many numbers shown on the screen and the number's placement, relative to other displayed information, is helpful in understanding its function.
The second problem with the hypertext method of providing help information is that a sequence or "flow" of help information between items is not established. This is because it is the user who is selecting the items to be explained and the user may randomly or haphazardly choose to have items explained in a sequence which is not representative of the role of the items in a computation. For example, in the calculation of A+B=C, the user may first select an explanation of A and then an explanation of C, which probably does not provide as good an understanding of the computation as if A and B were explained before C was explained.
Other help methods are even less adequate in explaining the function of items in a financial analysis system display screen. These methods often provide information about items in a manual-like format where the function of items is discussed as if the user were reading a textbook and turning pages by pressing keyboard or mouse buttons. The text in these methods often occupies the whole of the screen so that the user is provided with no visual reference of the items whatsoever.
As mentioned above, financial analysis systems use mathematical models to predict the effect that various factors will have on the user's financial status over the term of an investment. Every attempt is made to simplify the use of the system by keeping the number of inputs from the user low and by presenting the output as a single number or a graph. However, this simplification is at a sacrifice in the flexibility of the financial analysis system as the user is only allowed to specify their financial status at the beginning of the term and the system calculates their financial status at the end of the term. This is in contrast with the real world where an individual's financial situation is affected on a day-to-day basis throughout the term of the investment.
For example, assuming a user trying to simulate a one-year investment, a traditional financial analysis system would have the user specify starting parameters such as the amount of investment and rate of return and then use these parameters to calculate the accrued value at the end of one year. This does not take into account the possibility that the interest rate may fluctuate within the year. As another example, in a cash flow analysis other one-time events, such as an increase in salary, may occur during the investment term being modeled. The math models used in current financial analysis systems make it difficult to handle discrete events, that is, parameters whose values change during the course of the investment term.
Financial analysis systems on the market today generally use a "present value" or "internal rate of return" analysis methodology. These methods operate, respectively, by calculating the present value of the stream of cash flows or by calculating the internal rate of return associated with the cash flow stream. Such methods are well-known in the art.
In each method a discount rate may be specified by the user; however, this discount rate is maintained constant throughout the calculation. This is not an accurate reflection of actual discount rates which can fluctuate with time. Moreover, these math models based on present value or internal rate of return provide no means of modeling discrete events such as "windfall" capital realizations, one-time or intermittent expenses, or other discrete events which would affect a user's income in a non-continuous manner.
Further, the use of present value or internal rate of return analysis methodologies is confusing to the average user of a financial analysis system since these methodologies do not represent any actual quantity of cash held by the user at any time during the investments. The internal rate of return approach suffers from an additional shortcoming in that it gives no weight to the relative "size" of the investment. For example, an investment of $1,000 which returns $1,500 in five years has the same internal rate of return as an investment of $100,000 returning $150,100, even though in the second case the amount earned is 100 times larger than the first case. This is because the internal rate of return expresses its result as the ratio of return to investment.